[Management View]
REX American Resources Corporation reported a reduction in sales volume and net income, primarily due to shipment timing and reduced interest income from a lower cash balance. Management emphasized ongoing progress in the Gibson City plant expansion and carbon capture projects, supported by a strong balance sheet with zero bank debt. The company repurchased approximately 822,000 shares for $32.7 million, reducing outstanding shares by about 6.8% since December 2024.

[Outlook]
Management anticipates continued progress in ethanol facility expansion and carbon capture projects, with a focus on controlling operational efficiencies. The company is closely monitoring potential changes to the Inflation Reduction Act, particularly amendments to tax credit provisions that could affect project economics. Ethanol exports are expected to remain strong, with a positive outlook for 2025.

[Financial Performance]
Ethanol sales volume reached 70.9 million gallons, down from 74 million gallons in the prior-year period. Gross profit was $14.3 million, slightly lower than $14.5 million in Q1 2024. Net income attributable to shareholders was $8.7 million, compared to $10.2 million in the prior-year period, mainly due to lower cash balances and interest income.

[Q&A Highlights]
Question 1: What drives REX's ability to consistently deliver superior returns on capital and profitability?
Answer: CEO Zafar Rizvi attributes success to detailed monitoring of market conditions, including corn and ethanol prices, and the strong team at REX. The company's strategic locations and dedicated personnel are key differentiators.

Question 2: What deregulation measures from the Trump administration could benefit REX?
Answer: Stuart Rose noted that regulatory conditions are currently uncertain, but the inclusion of 45Q and 45Z tax credits in legislation is positive. Illinois Senate Bill 1723 is favorable for REX's ethanol location, situated away from aquifer restrictions.

Question 3: What are the industry fundamentals and outlook for ethanol margins?
Answer: Ethanol margins are expected to remain positive, supported by strong corn planting and favorable weather. Export opportunities could improve if tariffs with Canada and Mexico are resolved. However, natural gas prices are a concern.

[Sentiment Analysis]
Analysts expressed positive sentiment regarding REX's consistent profitability and strategic execution. Management conveyed confidence in ongoing projects and regulatory developments, while acknowledging external uncertainties.

[Quarterly Comparison]
| Metric | Q1 2025 | Q1 2024 |
|--------|---------|---------|
| Ethanol Sales Volume (million gallons) | 70.9 | 74 |
| Gross Profit ($ million) | 14.3 | 14.5 |
| Net Income ($ million) | 8.7 | 10.2 |
| Diluted EPS ($) | 0.51 | 0.58 |

[Risks and Concerns]
Potential changes to federal tax credits and regulatory conditions could impact project economics. Natural gas prices and export tariffs are additional concerns that could affect profitability.

[Final Takeaway]
REX American Resources Corporation continues to demonstrate resilience and strategic execution amidst regulatory and market uncertainties. The company's focus on expanding ethanol production capacity and carbon capture projects, supported by a strong balance sheet, positions it well for future growth. While external factors such as regulatory changes and commodity prices pose risks, REX's strategic initiatives and strong team provide a solid foundation for continued success.